Tesla Inc. (NASDAQ:TSLA)

The financial ratios presented demonstrate several notable trends between 2021 and 2025. Generally, asset utilization and profitability metrics exhibit a decline towards the end of the period, while liquidity and solvency ratios show improvement. The adjusted ratios consistently differ from the reported figures, suggesting the impact of specific accounting treatments or non-recurring items.

Asset Turnover

Both the reported and adjusted total asset turnover ratios initially increased from 2021 to 2022, peaking at 0.99 and 1.01 respectively, before declining steadily through 2025. The adjusted ratio consistently remains slightly higher than the reported ratio, indicating that adjustments enhance the apparent efficiency of asset utilization. By 2025, both ratios have fallen below their 2021 levels, suggesting a decreasing ability to generate sales from its asset base.

Liquidity

The reported and adjusted current ratios both demonstrate a consistent upward trend throughout the period, increasing from 1.38 and 1.54 in 2021 to 2.02 and 2.46 in 2024, and further to 2.16 and 2.66 in 2025. This indicates a strengthening short-term liquidity position, with a greater ability to cover current liabilities with current assets. The adjustments consistently result in a higher current ratio, implying that certain adjustments increase the value of current assets or decrease current liabilities.

Solvency & Leverage

Reported debt to equity and debt to capital ratios decreased significantly from 2021 to 2022, and remained relatively stable through 2023, before showing a slight increase in 2024 and 2025. The adjusted ratios follow a similar pattern, but are generally higher, suggesting a greater reliance on debt financing when adjustments are considered. Financial leverage, conversely, decreased from 2.06 in 2021 to 1.68 in 2025 for the reported figures, and from 1.67 to 1.43 for the adjusted figures, indicating a reduced reliance on financial leverage over time.

Profitability

Reported net profit margin peaked in 2022 at 15.41% before declining substantially to 4.00% in 2025. The adjusted net profit margin mirrors this trend, though the decline is less pronounced. Both reported ROE and ROA followed a similar pattern, peaking in 2022 and declining significantly by 2025. The adjustments to net profit margin, ROE, and ROA consistently result in higher values, suggesting that certain adjustments positively impact profitability metrics. The substantial decline in profitability metrics towards the end of the period warrants further investigation.

In summary, the company appears to be becoming more liquid and less leveraged, but is experiencing a decline in asset utilization and profitability. The consistent differences between reported and adjusted ratios highlight the importance of understanding the underlying adjustments impacting financial performance.

The adjusted total asset turnover ratio exhibited a fluctuating pattern over the five-year period. Revenues and total assets both increased consistently from 2021 to 2023, with a slight revenue decrease in 2024 and 2025. The adjusted total asset turnover ratio generally followed this trend, peaking in 2022 before declining in subsequent years.

Adjusted Total Asset Turnover Trend

The adjusted total asset turnover ratio increased from 0.88 in 2021 to 1.01 in 2022, indicating improved efficiency in generating revenue from assets. This improvement coincided with a substantial increase in adjusted revenues. However, the ratio decreased to 0.98 in 2023, 0.85 in 2024, and further to 0.73 in 2025. This decline suggests a diminishing ability to generate sales from its asset base, despite continued asset growth.

Revenue and Asset Relationship

Adjusted revenues increased from US$54,580 million in 2021 to US$98,337 million in 2023, demonstrating strong revenue growth. However, adjusted total assets grew at a faster rate, increasing from US$62,042 million in 2021 to US$130,881 million in 2025. The faster growth in assets, coupled with a stabilization and then decline in revenues from 2023 onwards, contributed to the observed decrease in the adjusted total asset turnover ratio.

Comparative Analysis with Reported Ratio

The adjusted total asset turnover ratio consistently remained slightly above the reported total asset turnover ratio across all observed years. The difference between the two ratios was minimal, suggesting that the adjustments made to revenues and assets did not significantly alter the overall interpretation of asset utilization efficiency. Both ratios demonstrate the same trend of initial improvement followed by a decline.

The observed decline in the adjusted total asset turnover ratio from 2022 to 2025 warrants further investigation. Potential factors contributing to this trend could include increased investment in less productive assets, inefficiencies in asset management, or a slowdown in sales growth relative to asset expansion.

The reported current ratio demonstrates a consistent upward trend over the five-year period. However, the adjusted current ratio, which utilizes adjusted current liabilities, reveals a more pronounced improvement in the company’s short-term liquidity position. Analysis indicates a strengthening ability to meet short-term obligations as time progresses.

Current Assets

Current assets exhibit a steady and substantial increase from US$27.1 billion in 2021 to US$68.6 billion in 2025. This growth suggests an expanding operational scale and potentially improved working capital management.

Current Liabilities

Current liabilities increased from US$19.7 billion in 2021 to US$31.7 billion in 2025. While increasing, the rate of increase is slower than that of current assets, contributing to the improved ratios.

Reported Current Ratio

The reported current ratio increased from 1.38 in 2021 to 2.16 in 2025. This indicates a growing margin of safety in covering short-term liabilities with short-term assets. The increase is consistent year-over-year.

Adjusted Current Liabilities

Adjusted current liabilities show a more moderate increase, moving from US$17.6 billion in 2021 to US$25.8 billion in 2025. The adjustments made to current liabilities appear to be reducing the reported short-term obligations, thereby improving the liquidity picture.

Adjusted Current Ratio

The adjusted current ratio demonstrates a more significant improvement than the reported ratio, rising from 1.54 in 2021 to 2.66 in 2025. This suggests that the adjustments to current liabilities are materially impacting the assessment of short-term liquidity. The ratio’s growth accelerates in later years, reaching 2.46 in 2024 and 2.66 in 2025, indicating a strengthening liquidity position.

The divergence between the reported and adjusted current ratios suggests that a portion of the initially reported current liabilities may not represent immediate cash outflows, or are subject to favorable contractual terms. The consistent upward trend in both ratios indicates a positive trajectory in short-term financial health.

The adjusted debt to equity ratio exhibits a fluctuating pattern over the five-year period. Initially, the ratio stands at 0.24 in 2021, increases to 0.11 in 2022, then rises again to 0.14 in 2023, and continues to climb to 0.17 in 2024 before settling at 0.16 in 2025. This indicates a changing leverage profile over time.

Adjusted Debt to Equity Ratio - Overall Trend

The adjusted debt to equity ratio demonstrates an overall increase from 2021 to 2024, suggesting a growing reliance on debt financing relative to equity. However, the ratio stabilizes in 2025, indicating a potential moderation in this trend. The initial decrease in 2022 is notable, followed by a consistent increase over the subsequent two years.

Adjusted Debt

Adjusted total debt shows a consistent upward trend throughout the period, increasing from US$8,873 million in 2021 to US$14,719 million in 2025. This growth in debt is a key driver of the observed changes in the adjusted debt to equity ratio.

Adjusted Equity

Adjusted total equity also increases steadily over the five years, moving from US$37,118 million in 2021 to US$91,728 million in 2025. While equity is growing, the rate of increase in debt appears to be higher, contributing to the rising adjusted debt to equity ratio.

Comparison to Reported Debt to Equity

The adjusted debt to equity ratio consistently exceeds the reported debt to equity ratio across all years. This difference suggests that the adjustments made to total debt and equity significantly impact the leverage assessment, indicating that the reported figures may not fully capture the company’s financial obligations or equity position. The gap between the adjusted and reported ratios remains relatively stable over time.

In summary, the company’s adjusted debt to equity ratio indicates a growing, though stabilizing, reliance on debt financing. The increases in both adjusted debt and adjusted equity contribute to this dynamic, with debt growing at a pace that results in a higher leverage ratio. The consistent difference between adjusted and reported ratios highlights the importance of considering these adjustments when evaluating the company’s financial leverage.

The information presents a five-year trend of debt and capital figures, culminating in adjusted debt-to-capital ratios. Total debt initially decreased significantly between 2021 and 2022, then exhibited a pattern of increases through 2025. Total capital consistently increased over the observed period. The reported debt-to-capital ratio reflects these movements, initially declining sharply and then gradually increasing, though remaining relatively stable in the latest two years.

Adjusted Debt to Capital – Overall Trend

The adjusted debt-to-capital ratio demonstrates an increasing trend from 2021 to 2025. Starting at 0.19 in 2021, it decreased to 0.10 in 2022, before rising to 0.12 in 2023 and continuing to increase to 0.14 in both 2024 and 2025. This suggests a growing reliance on debt financing relative to capital over the latter part of the period.

Adjusted Debt and Capital – Individual Trends

Adjusted total debt increased from US$8,873 million in 2021 to US$14,719 million in 2025. The largest single-year increase occurred between 2022 and 2023, with a rise of US$3,825 million. Adjusted total capital also increased consistently, moving from US$45,991 million in 2021 to US$106,447 million in 2025. The rate of capital increase accelerated over time, with the largest increase occurring between 2024 and 2025.

Comparison of Reported and Adjusted Ratios

The adjusted debt-to-capital ratio is consistently higher than the reported debt-to-capital ratio across all observed years. This indicates that the adjustments made to the debt and capital figures result in a higher leverage ratio. The difference between the reported and adjusted ratios suggests that the adjustments capture components not included in the standard debt and capital calculations, potentially reflecting operating leases or other off-balance-sheet financing arrangements.

In summary, while capital has grown substantially, the increasing adjusted debt-to-capital ratio suggests a growing proportion of debt financing is being utilized. The consistent difference between reported and adjusted ratios warrants further investigation into the nature of the adjustments being made.

An examination of the financial information reveals trends in adjusted financial leverage over a five-year period. Total assets and stockholders’ equity both demonstrate consistent growth annually. However, the adjusted figures present a slightly different picture regarding leverage, indicating a more conservative financial structure when certain adjustments are considered.

Adjusted Financial Leverage – Overall Trend

Adjusted financial leverage exhibits a consistent downward trend from 1.67 in 2021 to 1.43 in 2025. This suggests a decreasing reliance on debt financing relative to adjusted equity over the observed period. The rate of decline decelerates over time, with the largest decrease occurring between 2021 and 2022 (0.14), and the smallest between 2024 and 2025 (0.01).

Adjusted Total Assets and Equity

Adjusted total assets increased from US$62,042 million in 2021 to US$130,881 million in 2025, representing substantial growth. Similarly, adjusted total equity grew from US$37,118 million to US$91,728 million over the same period. The growth in equity appears to be a primary driver of the decreasing leverage ratio.

Comparison with Reported Leverage

Reported financial leverage also shows a decreasing trend, albeit at a slower pace than the adjusted leverage. The difference between reported and adjusted leverage narrows over time. In 2021, the reported leverage was 0.19 higher than the adjusted leverage, while in 2025, the difference is only 0.05. This suggests that the adjustments made to total assets and equity have a diminishing impact on the calculated leverage ratio as the company grows.

The consistent decline in adjusted financial leverage, coupled with the growth in both adjusted assets and equity, indicates strengthening financial health. The narrowing gap between reported and adjusted leverage suggests that the company’s financial structure is becoming more transparent and less reliant on specific adjustments to present a favorable leverage position.

The adjusted net profit margin exhibited a fluctuating pattern over the five-year period. Initial growth was followed by a decline, suggesting evolving profitability dynamics. Revenues consistently increased until 2025, though at a slowing rate, while net income attributable to common stockholders experienced significant volatility.

Adjusted Net Profit Margin Trend

The adjusted net profit margin increased from 12.05% in 2021 to a peak of 17.49% in 2022. This indicates improved profitability, potentially driven by operational efficiencies or favorable pricing strategies. However, the margin subsequently decreased to 12.26% in 2023, 9.22% in 2024, and further to 7.83% in 2025. This downward trend suggests increasing costs, pricing pressures, or a shift in sales mix.

Relationship to Revenue Growth

Adjusted revenues demonstrated consistent growth from US$54,580 million in 2021 to US$95,397 million in 2025. However, the rate of revenue growth decelerated over time. While revenue increased year-over-year, the declining adjusted net profit margin from 2022 onwards indicates that revenue growth was not translating into proportional profit growth. This divergence warrants further investigation into cost structures and pricing strategies.

Comparison to Reported Net Profit Margin

The adjusted net profit margin consistently exceeded the reported net profit margin across all observed years. This difference suggests that adjustments were made to net income and/or revenues to remove the impact of certain items, resulting in a more representative view of underlying profitability. The reported net profit margin experienced a more dramatic decline in 2024 and 2025, falling to 7.26% and 4.00% respectively, highlighting the impact of the items excluded in the adjusted figures.

The observed trends suggest a potential shift in the company’s profitability profile. While revenue continues to grow, the decreasing adjusted net profit margin indicates increasing challenges in maintaining profitability. Further analysis is needed to understand the specific drivers behind these changes and their potential implications for future performance.

The adjusted return on equity (ROE) exhibited fluctuating performance over the five-year period. While initially high, the metric demonstrates a declining trend towards the end of the observed timeframe. A comparison between reported and adjusted ROE reveals the impact of certain adjustments on the overall profitability assessment.

Adjusted ROE Trend

The adjusted ROE began at 17.72% in 2021, increased to a peak of 26.87% in 2022, then decreased to 17.67% in 2023. Further declines were observed in 2024 (11.23%) and 2025 (8.14%). This indicates a weakening of profitability relative to shareholder equity over the latter part of the period.

Relationship between Net Income and Equity

Adjusted net income increased from US$6,576 million in 2021 to US$14,432 million in 2022, contributing to the peak in adjusted ROE. However, adjusted net income subsequently decreased to US$12,054 million in 2023, and continued to fall to US$9,037 million in 2024 and US$7,470 million in 2025. Simultaneously, adjusted total equity consistently increased throughout the period, rising from US$37,118 million in 2021 to US$91,728 million in 2025. The combination of decreasing net income and increasing equity is the primary driver of the declining adjusted ROE.

Comparison with Reported ROE

Reported ROE mirrored the trend of adjusted ROE, starting at 18.28% in 2021, peaking at 28.09% in 2022, and declining to 4.62% in 2025. The difference between reported and adjusted ROE varied annually, suggesting the adjustments made to net income and equity had a material impact on the calculated return. The adjustments consistently resulted in a lower ROE figure than the initially reported value.

The consistent growth in adjusted total equity, coupled with the decreasing adjusted net income, suggests that while the company is increasing its equity base, it is becoming less efficient at generating profits from that equity. This trend warrants further investigation to understand the underlying causes of the declining profitability.

The adjusted return on assets (ROA) exhibited a dynamic pattern over the five-year period. Initially, the metric demonstrated substantial growth, followed by a period of decline. A review of the underlying components reveals insights into these fluctuations.

Adjusted ROA Trend

The adjusted ROA increased from 10.60% in 2021 to a peak of 17.60% in 2022. This represents a significant improvement in profitability relative to the asset base. However, subsequent years witnessed a downward trend, with the adjusted ROA decreasing to 12.07% in 2023, 7.82% in 2024, and further to 5.71% in 2025.

Net Income Contribution

Adjusted net income increased notably from US$6,576 million in 2021 to US$14,432 million in 2022, contributing to the initial rise in adjusted ROA. While remaining substantial, adjusted net income decreased in subsequent years, reaching US$7,470 million in 2025. This decline in net income partially explains the observed decrease in adjusted ROA.

Asset Base Evolution

Adjusted total assets also increased over the period, growing from US$62,042 million in 2021 to US$130,881 million in 2025. The rate of asset growth, however, outpaced the decline in adjusted net income in the later years, exacerbating the downward trend in adjusted ROA. The increase in the asset base suggests continued investment and expansion, but the returns on these investments diminished over time.

Comparison to Reported ROA

The adjusted ROA consistently exceeded the reported ROA across all years. The difference between the two metrics suggests that adjustments made to net income and total assets had a positive impact on the calculated return. The trends observed in both the reported and adjusted ROA are similar, indicating that the adjustments do not fundamentally alter the overall direction of profitability relative to assets.

In summary, the adjusted ROA experienced a period of strong growth followed by a consistent decline. This trend is attributable to a combination of decreasing adjusted net income and increasing adjusted total assets. While the adjusted ROA remained higher than the reported ROA, the overall pattern indicates diminishing returns on the growing asset base.